Vehicle Depreciation Calculator
Enter a vehicle price, a residual percent or an annual rate, and years to see its value, total loss and yearly depreciation schedule. How it works
Use the Vehicle Depreciation Calculator
About the Vehicle Depreciation Calculator
A $35,000 vehicle with a 40% residual value loses $21,000 over 5 years by straight-line depreciation: $4,200 a year, leaving $14,000. By double-declining balance it loses $14,000 in year 1 and $7,000 in year 2, then nothing, because the value has reached the $14,000 residual.
Value and yearly loss for $35,000, 40% residual, 5 years
| Year | Straight-line value | Straight-line loss | Declining-balance value | Declining-balance loss |
|---|---|---|---|---|
| 1 | $30,800.00 | $4,200.00 | $21,000.00 | $14,000.00 |
| 2 | $26,600.00 | $4,200.00 | $14,000.00 | $7,000.00 |
| 3 | $22,400.00 | $4,200.00 | $14,000.00 | $0.00 |
| 4 | $18,200.00 | $4,200.00 | $14,000.00 | $0.00 |
| 5 | $14,000.00 | $4,200.00 | $14,000.00 | $0.00 |
The schedule the calculator shows for these inputs. The declining-balance rate is 2 ÷ years (40% a year here) and the value never goes below the residual.
How to use this tool
- Enter the purchase price and the residual value as a percent of that price, or set Depreciation Basis to Annual rate % and enter the percent lost each year.
- Enter the number of whole years, from 1 to 100, and, for a residual value, choose straight line or declining balance.
- Read the value after the last year, the total lost and the year-by-year schedule.
Frequently asked questions
- How do you calculate straight-line depreciation on a car?
- Subtract the residual value from the price and divide by the years. A $35,000 car with a 40% residual ($14,000) over 5 years loses ($35,000 − $14,000) ÷ 5 = $4,200 a year, so it is worth $30,800 after year 1 and $14,000 after year 5.
- What is declining balance depreciation for a vehicle?
- Each year loses 2 ÷ years of the value at the start of that year, so the loss is largest in year 1 and then shrinks, and the value never falls below the residual. For $25,000, a 20% residual and 5 years, the yearly losses are $10,000, $6,000, $3,600, $400 and $0, ending at $5,000. Straight line loses $4,000 every year.
- What residual value should I use?
- The calculator does not know your vehicle, so it cannot suggest one. Look up what the same model and age sells for locally, divide that by the purchase price and enter the result as a percent. A 5-year-old $35,000 model that lists at $14,000 is a residual of 40%.
- Is this the market value of my car?
- No. It is book value from a formula, and make, mileage, condition and local demand are not in it. To make it closer to the market, set the residual from what the same model at the target age actually sells for near you.
- Why does declining balance show a $0 loss in later years?
- Once the value reaches the residual nothing more is lost. A $20,000 vehicle with a 30% residual over 4 years loses $10,000 in year 1 and $4,000 in year 2, which brings it to the $6,000 residual, so years 3 and 4 lose $0. The average shown for this method ($3,500 a year) is the total divided by the years, not what any one year loses.
- How do I depreciate a car by a percent each year?
- Set Depreciation Basis to Annual rate % and enter the rate. Each year loses that percent of the value at the start of the year, so value = price × (1 − rate)ⁿ. A $35,000 car at 15% a year loses $5,250 in year 1, $4,462.50 in year 2 and $2,740.53 in year 5, and is worth $15,529.69 after 5 years. The 15% filled in is an example, not a market figure.
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